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Wednesday, April 4, 2012

Local Currency - Columbia Cash

Local currencies can play a vital role in the development of stable, diversified regional economies, giving definition and identity to regions, encouraging face-to-face transactions between neighbors, and helping to revitalize local cultures (New Economics Institute). Local currencies strengthen local economies by avoiding the leaky bucket syndrome where wealth that is generated within a community "leaks" out to the wider economy at large.A local currency is not simply an economic tool; it is also a cultural tool. As such, Columbia, Maryland, which was visionary when it was created, seems ripe for the creation of "Columbia Cash" which would help to strengthen the local economy, and be particularly supportive of vibrant Village Center commerce as they face competition from big box stores on the periphery of town.

Since 2002 there has been an upsurge in local currency usage particularly payment voucher-based systems that are exchangeable with the national currency. Such currencies aim to increase the resilience of local economies by encouraging re-localisation of buying and food production. The drive for this change comes from a variety of community-based initiatives and social movements. The Transition Towns movement originating in the UK has utilized local currencies for re-localisation in the face of energy descent from peak oil and climate change. Other drivers include movements against "Clone Town" and the impacts of big-box stores.

Time Dollars, Ithaca Hours, and BerkShares are among the most successful local currency systems in the USA. In considering a local currency model for Columbia, BerkShares seems to be a viable example. BerkSharesare a local currency for the Berkshire region of Massachusetts intended to be a tool for community empowerment, enabling merchants and consumers to plant the seeds for an alternative economic future for their communities. Launched in the fall of 2006, over one million BerkShares were circulated in the first nine months and over 3.3 million as of March 2012 (New Economics Institute).

In considering a local currency for Columbia, The Schumacher Society recommends the following policies to maintain long-term confidence:

The issuing organization should be incorporated as a nonprofit so the public understands that providing access to credit is a service not linked to private gain. The organization should be democratic, with membership open to all area residents and with a board elected by the members.

Its policy should be to create new short-term credit for productive purposes. Such credit is normally provided for up to three months for goods or services that have already been produced and are on their way to market-credit for things which pay for themselves in a very short time.

The regional bank or currency organization should be free of governmental control-other than inspection-so that investment decisions are independent and are made by the community.

Social and ecological criteria should be introduced into loan-making. (Community investment funds also use a positive set of social criteria particular to their own region. These funds could join with hard-pressed local banks to initiate regional currencies.)

Loan programs and local currencies should support local production for local needs.

Community groups across the country, from Kansas City, to Eugene, to Boulder, to Philmont, New York, are issuing their own currencies, and each is uniquely tailored to the people, culture, and products of the region. As Columbia looks to ensure a vibrant next 40 years, local currency warrants a place in the discussion.